Tata Consultancy Services Ltd ( TCS ), India’s largest software firm, has overtaken Accenture Plc to become the world’s second biggest IT services employer, with nearly 264,000 people on its payroll, but with a revenue that is less than half of the Dublin-based technology and consulting firm.

International Business Machines Corp. (IBM), which does not disclose the number of employees by businesses that include computer hardware and software licences, employs nearly 300,000 people in its services division, at least two executives confirmed on condition of anonymity. Accenture, which announced its second-quarter earnings on 28 March, said it had about 261,000 staff worldwide. (Also read: IT & ITeS sector overview)

However, Accenture and IBM are way ahead of TCS on another important parameter—revenue productivity. For instance, while TCS’s revenue per employee is around $46,000, it’s $197,000 for IBM and about $107,000 for Accenture. This is because while Accenture sells more high-end consulting services as part of its offerings, IBM earns more by bundling different hardware and software solutions as part of large deals.

Global annual revenue for Accenture, the world’s second largest technology and consulting firm by sales, stands at $28 billion—more than twice what TCS generates. From its global technology and business services divisions, IBM generated about $59 billion in 2012. (Also read: Hiring Trends: Hiring to continue in 2013)

An IBM spokesperson said the company employs more than 400,000 employees globally. The spokesperson declined to disclose the number of employees in their IT services business.

At the end of their December quarter, overall headcount at TCS stood at 263,637—well ahead of Infosys Ltd, Cognizant and Wipro Ltd. While Infosys and Cognizant had more than 150,000 employees at the end of their last quarter, Wipro’s IT services business accounted for 142,905 employees. Capgemini employs about 125,000 people worldwide.

The gap widens considerably when the quarterly numbers are taken into account. For the December quarter, TCS added 17,000 to its total headcount—more than Infosys, Cognizant and Wipro put together for that period. (Also read: Infosys signs five-year deal with BMW)

In an October interview, TCS chief executive and managing director Natarajan Chandrasekaran had said that the company would continue to follow its strategy of employee growth in the near term.

“We are recruiting the right talent, growing them, and working on execution. We will grow and we will stay with this model,” Chandrasekaran said.

Also, during the Nasscom Leadership Summit in February, Chandrasekaran indicated that areas such as Big Data would create more employment opportunities within the company.

“We need a lot of data scientists now. We have a lot of knowledge of the many customers we work with like manufacturing companies where machines are producing a lot of data,” said Chandrasekaran.

For years, Indian software firms have been hiring thousands of engineering graduates and building large campuses for training and housing them. The so-called “pyramid model” that sees the entry of a large number of fresh engineering graduates every year brings down the cost of software development and maintenance projects.

“We do not have any reservations on TCS’s ability to deliver; however, the sheer size and scale required to deliver bare minimum returns is an immense challenge and the risk of unforeseen challenges to sustained delivery excellence needs to be priced in,” Kotak Institutional Equities said in a recent research report, adding that TCS could end up with well over half a million employees over the next few years at its current rate of growth.

Other experts tracking the sector feel that the number of fresher recruitment at top IT exporters will gradually slow as more companies attempt to beef up their on-site presence.

“The pyramid model of hiring is evolving, and is already undergoing a change as companies are expanding their on-site presence and recruiting in the US, too; so the number of freshers recruited will gradually slow. If you take Infosys, that mix is starkly visible. Between FY04 to FY08, their fresher mix was 75% to 85%, while in the last three years it has come down to 55-65%,” said analyst Sandeep Muthangi at India Infoline Ltd.

Experts also feel that employee additions at TCS will not affect their margins in the near term as the company gets close to having almost half a million employees on its rolls.

Salary cost as a percentage of total revenue for TCS currently stands at about 50-55%, while for the industry it is closer to 60%, according to an analyst at a foreign brokerage who did not want to be named.